Promising NYC startup BankSimple moves HQ to Portland

Faith Cathcart/The OregonianBankSimple CEO Josh Reich was in the company's small Pearl District office Tuesday, preparing for his move to Portland from New York. Using online tools and mobile apps, BankSimple hopes to make it easier for young people to manage their finances prudently. Reich is targeted the financially guilty...People who know what they should be doing with their money, but they'ree not doing it because they've soured on the financial system."

The state's entrepreneurs have a long tradition of leaving town when they find success, opting for bigger markets, deeper talent pools and richer investors elsewhere.

BankSimple is doing the reverse.

The Brooklyn-based financial services company plans to announce today that it will move its headquarters to Portland, opting for a new city that the young company says better suits its character.

"It seems like a place where people are friendly, but they're still very passionate about what they do," said Alex Payne, who was a lead engineer at Twitter before leaving to help start BankSimple last year.

BankSimple is developing a set of online tools so clients can keep close tabs on their money and their budget. It already has a small, five-person development office in Portland's Pearl District, led by Payne, who moved here last year.

Employees: 17, five currently in Portland. Most of the rest will move here shortly, and BankSimple plans to add a dozen more by the end of the year.

Funding: $13.1 million in venture capital, including a $10 million round this month led by IA Ventures and Shasta Ventures.

Now the rest of the company and its executive team will join them, moving a dozen more employees into bigger quarters plus a dozen more by year's end.

The success of any given startup is always an iffy proposition, and BankSimple's jobs won't change the city's tech climate by themselves.

By virtue of Payne and other high-profile leadership, however, BankSimple has enormous visibility among the nation's hyper-connected technology elite. So its relocation carries enormous symbolic importance for Portland, which has made software a key economic priority.

The move is emblematic of a historic upsurge in Oregon entrepreneurship, with startups attracting outside investment and adding jobs at a pace the state hasn't enjoyed since the dot-com era.

"Things are rolling," said veteran Oregon tech entrepreneur Nitin Khanna, now chief executive of a boutique investment bank called MergerTech.

"I think the climate has totally changed," Khanna said. "I think we're finally getting a crop of themes and ideas and that people are feeling there's an ecosystem."

For many years, Portland has lacked a concentration of experienced software development talent and leadership. As startups grew, they felt a pull toward Seattle, the Silicon Valley or the East Coast.

That's what happened to Jive Software, which created a new market for social networking technology within corporations.

That's less of a problem now, according to Sam Blackman, chief executive of Portland-based Elemental Technologies, whose software helps major broadcasters reach large online video audiences.

Oregon has developed a special expertise in some of the hottest technologies, he said.

"Portland is strong in industries that are getting bigger by the day -- open source (software), mobile and video," Blackman said. "It's really very good news that we're very, very strong in some of the hottest sectors today."

Faith Cathcart/The OregonianAlex Payne, BankSimple's chief technology officer, moved to Portland last year from San Francisco, where he was one of Twitter's first employees and a lead engineer. He said Portland's startup community is a great deal stronger than its reputation would suggest. "Maybe," he said, "I just happened to show up when it feels like there's a lot going on in the Portland tech scene."

"We have a long way to go," Mayor Sam Adams said Tuesday after BankSimple briefed him on its move. "But these early results of our economic development strategy prove to me that we're on the right track."

The city's efforts didn't directly impact BankSimple's decision, and there aren't any economic development incentives tied to the move. But Payne said the city's efforts did help create an inviting atmosphere.

"It lets the tech community and the startup community know that Portland is serious," Payne said.

The growth in Oregon's startup scene has begun showing up in state jobs data.

Any comparison to that era invites recollections of the economic disaster that followed when the dot-com bubble burst. Lucrative venture rounds and huge public stock offerings by unprofitable companies are sparking fears about the current's tech boom.

Many Portland startups are already self sustaining, said Blackman, Elemental's CEO. But he cautioned that there's a certain amount of froth in the market now, too.

"It's not as bad as the Bay Area," Blackman said, "but even in the Portland market, I think we've seen some pretty dramatic funding rounds closing around companies today."